Late payments continue to plague KanCare providers

Judy Thompson, the founder and director of Sunshine Connection, says delays in payments of state grants causes funding difficulties for her and other health providers across the state.

The three private insurance companies administering the state's managed care Medicaid program, KanCare, struggled to pay claims quickly during its first full year of implementation.

An executive summary released by the Kansas Department of Health and Environment found that in 2013 none of the three managed care organizations, or MCOs, met the benchmarks for clearing clean claims within 20 days and all claims within 60.

"We are withholding part of the MCOs’ payments for failing to meet the requirement that they process 100 percent of clean claims within 20 days and 99 percent of all non-clean claims within 45 days," KDHE spokeswoman Sara Belfry said. "None of the MCOs met this pay-for-performance measure any month during the first year of implementation."

Testimony provided by the Kansas Hospital Association at the same legislative meeting this week stated that Kansas hospitals have seen an increase in accounts receivable more than 90 days old since the switch to managed care. That metric differs from claims processing in that it also includes the time it takes a hospital to submit the claim after it provides service, which varies.

The hospital association data showed that one of the companies, Sunflower State Health Plan, had improved on its claims processing from December 2013 to March 2014 but was still the worst of the three. Amerigroup and United Healthcare, while better, had actually crept up in the percentage of accounts receivable more than 90 days old from December 2013 to March 2014.

The hospital association said accounts receivable were generally resolved more quickly before KanCare.

"The results of the survey reflect our members' concerns," the association's testimony states. "Hospital patient accounts receivable under KanCare that is over 90 days old is significantly higher than it was under the fee-for-service Medicaid program. And when compared to Medicare and the hospital's highest volume commercial payor, the hospital accounts receivable comparison is even more out of line."

Concerns over claims processing delays spurred legislators to pass a "prompt payment" bill last session, in part to protect small home- and community-based providers who serve Kansans with developmental disabilities and rely almost solely on Medicaid.

The law imposes a 12 percent interest penalty on the three managed care organizations for late payments and provides a mechanism for the state to provide emergency payments to providers. It went into effect last month.

“There hasn’t been enough time yet to see what impact that law will have,” said Chad Austin, senior vice president of government relations for the hospital association.

Austin said the association intends to survey members quarterly about accounts receivable in order to give legislators another measure of payment timeliness.

Tish Hollingsworth, the association's senior director of reimbursement, said the 90-day mark is a threshold at which it becomes costly for hospitals to monitor outstanding claims. It is a wholly different measure than the claims processing data that KDHE is vetting, though.

“This is dicing and slicing in a whole new way," Hollingsworth said. "We hear from our members claims are hung up.”

Hollingsworth and Austin said the quarterly surveys will help provide some context to those anecdotes, which Hollingsworth also said suggest the payment issues may have dissipated somewhat after KanCare's initial rollout.

“It’s probably improved," Hollingsworth said. "That’s the general feeling I think a lot of our members are having, because they’ve ironed out the major issues associated with the transition.”

KanCare, an initiative spearheaded by Gov. Sam Brownback, is intended to save the state $1 billion over five years by placing the state's 350,000 Medicaid recipients under the administration of three private insurance companies paid a capped annual rate for service plus performance bonuses.

Belfry's department is part of an advisory group working on KanCare billing issues that also includes representatives of the hospitals and the MCOs.

"While we cannot speak for the individual MCOs, KDHE continues to work with both providers and the MCOs to resolve the issue of timely claims through our work group," Belfry said.

Keen Umbehr, an Alma attorney who is the Libertarian candidate for governor, released a statement calling the hospital association's assertion that claims were processed faster when the state was administering Medicaid "shocking."

“When the Governor’s own KDHE and the Kansas Hospital Association both confirm that Brownback's privatization of the state's $3 billion Medicaid program is not working, it's time; it's past time, for action to be taken,” Umbehr said.